Down the Digital River, into the heart of download darkness

Fail and You Before the internet, software distribution was cumbersome. While it was relatively cheap to reproduce computer code once it was written, sending floppy disks and CD-ROMs about created friction. Now, with heavy adoption of high speed connections, you can easily buy software and download it over the tubes. Bytes are bytes, no matter the medium.

Unfortunately, technological idealism is no match for old school greed.

Digital River is an e-commerce service provider for software. If you have a software company and you're too lazy or too stupid to run your own e-commerce system to sell your wares over the internet, you can contract Digital River to do it. As a consumer, you have likely never heard of this company, unless they have tried to hustle you.

Nvidia's software store is run by Digital River. If you buy a program from Nvidia, you have a limited amount of time to download it, usually thirty days. Sure, you have a license key and all that shit, but after that time period has expired, you need to buy the software again if you want to download it again. That is, unless you've bought into Digital River's "extended download service," which costs about eight bucks.

If you pay for this service, you have the right to download the software for two years. You only have a license for one copy, but you can download it as many times as you want over that period.

For comparison, if you were to buy a video game from Valve Software, who has developed their own content distribution mechanism called Steam, you can download the game as many times as you want without any additional charge. If you buy a twenty dollar DVD Decoder program from Nvidia, however, Digital River will charge another few bones to download that same twenty five megabytes for two years.

Just what the fuck is going on here? If you buy a program through Digital River, you get the same sequence of bytes as anyone else who buys the same program. Digital River's pitch is that they keep a "backup copy" for you. But in reality the only cost incurred by allowing future downloads of the software is the cost of bandwidth, and that makes for a pretty disgusting profit margin.

If you were to take the same twenty five megabyte file that you bought from Nvidia and store it in Amazon's S3 storage service for two years, you'd pay a little less than nine cents. Every time you re-download the file from Amazon, you'd pay about four one-thousandths of a cent. Considering that you'd really only re-download the program whenever your computer crashed and you needed to reinstall, that's pretty much a roundoff error. Digital River's markup on that one program from Nvidia is approaching nine thousand percent. Fuck, I don't know who thought this idea up, but give that man a raise.

Of course, it's not just Nvidia customers whose wallets are being lightened. This service is seemingly tacked on to any other online store run by Digital River. If you're buying protection from Symantec, be prepared to cough up ten bucks to extend your pleasure. Buying a video game from Electronic Arts? For just a few dollars, you too can be protected against the slow encroachment of honest business into the internet. No online grift would be complete without some kind of involvement from Microsoft. If you want to pay to download a copy of Microsoft Money, you can add six dollars to your line-item expense for rip-offs. In many of these cases, the extended download service is added to your order by default, which saves you the time and effort of actively participating in your own victimization.

You know how whenever you buy electronics in a store, they try to upsell you the pure-profit "extended warranty"? Well, the business geniuses at Digital River have figured out how to bring this racket to the internet. To nobody's surprise, both Digital River and Nvidia did not return a request for comment. If they did, I'm sure it would go something like "we are providing a valuable service to the consumer and blah blah oh fuck somebody dropped money all over the floor, who is going to clean that up?"

Nobody is forcing you to pay for this service. If you don't want it, remove it from your order. You're free to make a backup copy of the software you download once it's on your hard disk. As pathologically libertarian-slanted IT workers, we can identify with this argument. However, we're not the ones being fleeced. It's the customers who don't understand how big of a racket this is. The same sort of thing happens in other industries: an auto mechanic up-selling the customer on synthetic oil, or a money manager convincing a client that mutual fund load fees are worth the vig. All it takes is an uninformed consumer and a salesman with larceny in the blood.

Why should the internet be any exception? After all, why would Digital River want to allow customers to freely re-download software that they've already paid for, when with just a little bit of assholery, they can make a 9,000 per cent profit in the same situation? I don't know about you, but every time I need to rebuild a Windows machine, I enjoy every little fuck-you that's thrown my way: having to load RAID drivers from a floppy disk on a machine with no floppy disk drive, the endless cycle of reboots from Windows automatic update, and now, just for that extra pain in my balls, finding out that I need to re-purchase software I already bought because I assumed the vendor would be reasonable in such a situation.

For the players in the business, it's a great hustle. Digital River posted a staggering 85 per cent gross profit margin last quarter. In the latest annual report, CEO Joel Ronning called DR "the brand behind the largest brands on the internet," kind of like how ez-wider rolling paper is the brand behind the biggest brand in modern drug smoking. Considering the type of business these guys are in, I wouldn't be terribly proud of that statement.

In the end, this kind of profiteering can be defeated. If you ever find that you need to re-install Nvidia's DVD Decoder program and you didn't buy the extended download service, you can do what I did: download the trial version and plug in the license key they e-mailed you.

Wow, Digital River. Can you see how much longer my middle finger is than all the rest? ®

Ted Dziuba is a co-founder at Milo.com You can read his regular Reg column, Fail and You, every other Monday.